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The AI Economy

Work, Wealth and Welfare in the Robot Age

By Roger Bootle
13-minute read
Audio available
The AI Economy: Work, Wealth and Welfare in the Robot Age by Roger Bootle

The AI Economy tackles the most pressing economic questions surrounding the rise of Artificial Intelligence. How will the development and spread of smart machines’ age affect our jobs, wages and work hours? How will it impact investment, interest rates and inequality? Acclaimed economist Roger Bootle applies his knowledge of history, technology and macroeconomics to investigate how the fourth industrial revolution will transform the global economy. 

  • Business owners and investors who want to make the most of the new economy
  • Government officials and policymakers who want to help people thrive in the robot age
  • Individuals who wish to prepare themselves for the AI revolution

Roger Bootle is a British economist and columnist for The Daily Telegraph. He founded the macroeconomic research consultancy Capital Economics and has written multiple influential economy books, among them The Death of Inflation (1998) and The Trouble with Europe (2014).

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The AI Economy

Work, Wealth and Welfare in the Robot Age

By Roger Bootle
  • Read in 13 minutes
  • Audio & text available
  • Contains 8 key ideas
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The AI Economy: Work, Wealth and Welfare in the Robot Age by Roger Bootle
Synopsis

The AI Economy tackles the most pressing economic questions surrounding the rise of Artificial Intelligence. How will the development and spread of smart machines’ age affect our jobs, wages and work hours? How will it impact investment, interest rates and inequality? Acclaimed economist Roger Bootle applies his knowledge of history, technology and macroeconomics to investigate how the fourth industrial revolution will transform the global economy. 

Key idea 1 of 8

The spread of robots and AI will lead to a fourth industrial revolution similar to the ones we experienced before.

How can we predict the future of the global economy? Well, in order to understand the present and speculate on what’s next, we might look to the past for answers.

For economists, the most significant historical process to study is the Industrial Revolution. But according to American economist Robert Gordon, there has not just been one but three separate industrial revolutions. The first was the process of technological innovation, social and political change, which began in Great Britain in the late eighteenth century with the invention of steam engines and railroads.

The second one began at the end of the nineteenth century, with the invention of electricity, combustion engines and telephones. The third one happened in the 1960s, after the invention of the computer. And now, with the technological advancements of robots and AI, we are about to enter a fourth industrial revolution.

However, AI and robotics have been so overhyped that it's tempting to think that they will usher in a much more radical transformation of the world, rather than "just" another industrial revolution. Now, it’s true that robots and AI have made significant strides in recent years – in processing power, algorithmic decision-making and text and image recognition. In 2016, for example, Google’s DeepMind AI beat the reigning human champion of Go, a complicated Chinese board game.

But even here, progress has been limited. For example, Google recently tried to train AI to recognize images of cats on YouTube with much less success: it took the power of 16,000 computers to identify a single one. And then there are still plenty of skills, including creative thinking, emotional intelligence and manual dexterity, that robots and AI have difficulty mastering, and there is no obvious solution in sight. So despite what AI enthusiasts promise, there is little reason to believe that machines will replace humans in all but a very specific set of jobs in the near future.

So what can we expect from the fourth industrial revolution of robots and AI? Well, even though the previous revolutions did not lead to an immediate improvement in living conditions for workers, over time their wages and quality of life increased. In the year 2000, the global per capita GDP was over thirty times more than it was in 1800. Similarly, the AI revolution might be more of a process than a single, dramatic event. But if it follows the same pattern, it will boost productivity and economic growth, making everyone better off in the long run.

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